Starved of capital receipts through the PSU disinvestment route and facing a shortfall in tax revenue, the government has set in motion plans to raise revenue through other options. The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved a finance ministry plan to fast-track the sale of a part of government-held shares in Axis Bank, by deferring the implementation of a March 2012 decision to wind up SUUTI, the firm through which the government holds shares in the private bank.

But things are not really shaping up for the finance ministry. While the largest disinvestment plans — Coal India, IndianOil and BHEL — aren’t making any headway, the ministry’s demand for special dividends have also received lukewarm response from even some of the cash-rich ones like Coal India. The Cabinet also decided on Thursday to refund spectrum fees amounting to R11,324 crore to state-run telcos BSNL and MTNL for surrendering 4G radio waves bought in 2010, adding to the finance ministry’s woes, even though the disbursal of these amounts can be postponed to next fiscal.

Through SUUTI, the government holds 20.7% in Axis Bank, 11.32% in ITC and 8.21% in Larsen & Toubro (L&T). At current market prices, these stakes are worth around R47,000 crore.

The current plan is to sell government’s 12-13% stake in Axis Bank (which could fetch around Rs 7,200 crore), although sale of stakes in the other two companies — ITC and L&T — could also be considered later, sources said. The government is unlikely to opt for the competitive bidding route for the these stake sales and the offers would likely be restricted to class of buyers like Life Insurance Corporation, State Bank of India or other PSU banks, the sources added.

The winding up of SUUTI and transferring its assets to the proposed National Asset Management Company (NAMC) as was planned earlier would have slowed the stake sale at a time the government is keen to shore up resources to meet the fiscal deficit target of 4.8% of GDP. Once the NAMC is created, as per the March 2012 Cabinet decision, it was in turn to take loans from banks leveraging its assets to buy government stakes in public sector companies. That would require Cabinet decisions for each purchases, causing delays the government can ill-afford at this juncture.

On Thursday, an empowered group of ministers headed by finance minister P Chidambaram deferred a decision on